Kerala Struggles with Conditional Loan for Wayanad Rehabilitation

Kerala's Finance Minister K N Balagopal criticizes the Centre's Rs 529.50 crore conditional loan for Wayanad landslide rehabilitation. The loan under the 'Scheme for Special Assistance to States for Capital Investment 2024-25' must be utilized by March 31, posing practical difficulties for the state.

The Kerala government is facing a significant challenge as it grapples with a Central government-sanctioned loan of Rs 529.50 crore aimed at rehabilitating landslide-hit areas of Wayanad. The state is required to use the funds by March 31, a condition described as a 'huge practical problem' by Finance Minister K N Balagopal.

The loan is part of the Centre's 'Scheme for Special Assistance to States for Capital Investment 2024-25', with stipulations that demand the funds be forwarded to implementing agencies within 10 working days of release. Any delay would attract interest payments, calculated according to the weighted interest rates of previous market borrowings.

Despite the constraints, Kerala is pushing forward with rehabilitation plans and aims to communicate its difficulties to the Central government. Criticism also stems from opposition figures like V D Satheesan, who argue that the loan arrangement undermines Kerala's need for a more substantial financial package following devastating landslides.